The IRS is the agency within the U.S. Treasury Department responsible for tax collection and tax law enforcement. CPAs working for the IRS perform a wide variety of work, including examining, analyzing and interpreting accounting data, designing, developing, operating and inspecting accounting systems and advising on accounting and financial management. As with all government agencies, IRS employees are paid according to the General Schedule, or GS, which is set by Congress. The GS is a highly structured schedule of 15 progressive pay grades and salary increases within pay grades called “steps.”

Standards

CPAs are qualified to enter at a GS-5 pay grade, or higher, based on their level of education and experience. For instance, a CPA, fresh from taking the exam, might enter at GS-5, but a CPA with experience or other advanced degrees may qualify to enter at pay grades GS-7 through GS-9. A CPA with experience in tax law and analyzing business and trade practices may be able to enter at GS-10. To be considered qualified to enter at levels GS-11 and above, the CPA must be able to show diversified professional experience in positions of increasing responsibility.

Basic Pay Grades

The GS pay rates are reviewed annually, although GS rates were frozen in 2010. Within each pay grade, there are 10 steps of progressive pay increases. According to the 2012 GS, the basic GS-5 pay grade begins with Step 1 at $27,431 and ends with Step 10 at $35,657, with each progressive step having an increase of $914 per step. The other 2012 basic GS rates are: GS-6: $30,577 to $39,748, with each step increasing by $1,019 per step; GS-7: $33,979 to $44,176, with an increase of $1,133 per step; GS-8: $37,631 to $48,917, with an increase of $1,254 per step; GS-9: $41,563 to $54,028, with $1,385 per step; GS-10: $45,771 to $59,505, with $1,526 per step; GS-11: $50,287 to $65,371,with $1,676 per step; GS-12: $60,274 to $78,355, with $2,009 per step; GS-13: $71,674 to $93,175, with $2,389 per step; GS-14: $84,697 to $110,104, with $2,823 per step; and GS-15: $99,628 to $129,517, with $3,321 per step.

Locality Adjustments

If you work in certain locations, you can receive additional compensation based on the cost of living in those areas. The GS has a highly formulaic approach to determining these rates as well. For instance, if you work in Atlanta, you will get an additional 19.29 percent above the basic GS scheduled rate. If you work in Boston, the locality adjustment is 24.80 percent higher. Examples of other locality adjustments are: Buffalo, 16.98 percent; Chicago, 25.10 percent; Cincinnati, 18.55 percent; Cleveland, 18.68 percent; Dallas, 20.67 percent; Denver, 22.52 percent; and Indianapolis 14.68 percent.

Advancing in Steps

The amount of time it takes for an employee to advance up each step within a pay grade is established by law. You must be on the job for one year before you can advance from Step 1 to Step 2, another year before you can advance from Step 2 to Step 3 and another year before you can advance from Step 3 to Step 4. You must be on the job two years between each step for Steps 4 through 7. Three years is required before each step progression between Steps 8 through 10. Therefore, to advance from Steps 1 through 10 in a single pay grade takes 18 years. You can, however, be promoted to a higher pay grade based on merit.

Two-Step Promotion Rule

The highest step level of each pay grade has a higher rate than the lowest step level of the next highest pay grade. For that reason, the GS has the Two-Step Promotion Rule. If you are promoted to a higher pay grade, you are entitled to the lowest pay rate of the higher grade that exceeds your existing pay rate by not less than two step increases.

About the Author

Lisa Dorward was a corporate financial executive and business consultant for more than 15 years before becoming a writer in 2003. She has B.A. degrees in both history and creative writing and earned her M.F.A. in creative writing in 2008, specializing in novel-length historical fiction.